tv Fast Money Halftime Report CNBC January 4, 2018 12:00pm-1:00pm EST
be a very difficult problem. >> you have a very busy afternoon ahead of you meanwhile stocks obviously off session highs but up 28. 25k coming just weeks after 24k. the fastest one-point surge in the history and we'll watch the winter storm let's get to the judge and "the half." welcome to "the halftime report." our top trade this hour 25,000 and beyond as stocks hit yet another major milestone, some of the biggest money on wall street growing more bullish today how far can stocks climb with us for the hour today, jon najarian from new york city, josh brown from minneapolis and pete najarian. let's begin with the markets today. as we said, the dow crossing 25,000 for the first time ever an incredible run that some see continuing for a while new at noon, i spoke exclusively
to david tepper today to told me the following when i asked him what he thought about stocks it was clear he was very positive telling me, explain to me where this market is rich it's not rich with the tax thing that just changed earnings projections. with earnings forecasts going up and interest rates where they are, how is this market expensive, he said i don't see the overvaluation. world growth is higher, there's no inflation, the market coming into this year doesn't look rich in fact it looks almost as cheap as coming into last year he said the market can't go down until the bond market gets hit it's amazing where interest rates are. josh brown, what do you make of what david tepper told me? >> well, i guess it depends on your definition of expensive so by the most popular measures, the market absolutely is expensive which is not a judgment on where it goes from here, because expensive can get much more expensive. but when you look at something like an adjusted p.e. ratio,
you're talking about 95th percentile or higher, and the only two times we've been anywhere near this level, both times we've had a pretty severe downturn follow. however, some of those 2008 and 2009 major earnings losses that are in part causing the ratio to be so high start to roll off as we get through those years going forward. and, by the way, it hasn't mattered yet so we are expensive. but that in and of itself doesn't tell you anything about what the next six months or one year look like >> yeah, we've got steve weiss joining us on the phone as well. steve, when you hear what tepper has to say, if you look at the fact that earnings expectations and the numbers are going up, ubs just took theirs up today and we'll talk to their strategist who did that in just a second and where interest rates are, and they don't seem to want to budge either, it's hard to argue with what tepper is saying
>> i agree with dave expensive is a relative term the facts are we have nothing to relate it to in terms of historical parameters given where we are with the global economy, with global interest rates, with the perception interest rates aren't going to run away from us so that's a whole different paradigm than what we've typically seen where the global economy has been spotty, europe is not doing well, we are. where interest rates are not at zero or lower in some very big economic regions and still at historically very low rates. and if you want to use historic references, you can say that below 3% is generally extremely accommodative, whereas 3% to 5% is neutral as i said on the show the other day, there is no playbook for this but what you do have is you have tremendous momentum from the tax bill, which i think will find
its way more into domestic equities and that will be the leader, small midcap, than what we've seen over the past however, you'll still have the big cap stocks, big cap technology go because that's what people know, that's where the real momentum is take a look at baba, at facebook finally moving, et cetera. so i'm with dave dave has caught this all the way up and i see no reason to get off the bus right now. >> you know, he also, doc, sort of made the point since weiss mentions facebook, you look at facebook's earnings expectations, say, going out to 2020, the stock still looks cheap. it's like 14 times earnings making the point that if you look at the nasdaq and don't get so caught up with the 7,000 round number of the nasdaq closing above that historic level for the first time ever, if you look at some of the stocks, even some of the f.a.n.g.s, the facebooks, the googles, you can maybe an argument that they are cheap relative to some of the other
bigger names in the market, the coca-colas, the kelloggs, et cetera. >> i think where tepper is exactly right is that we were trying to come up with a case of not necessarily, you know, putting on the bear suit or anything, judge, but we were saying, well, what could disrupt somebody like facebook obviously regulation in europe about privacy and things like that that was something we fired at other than that, yeah, earnings going forward are going to be strong that's what it looks like right now. you look at what koroda said today, the bank of japan, head of the bank of japan said monetary policy is going to be easy, in quotes, for the foreseeable future you've got china, fastest pmi that they have had since 2014. that's a very positive thing and china is sending an envoy over to south korea tomorrow and saturday to talk about how do we deal with north korea and so forth. those are really positive steps. you put that with what we're seeing in the market here and
it's not surprising that we've got triple-digit gains. >> pete, how do you see it this sounds like it matches up with the way you think as well. >> absolutely it does. dave tepper has been right so many different things. the thing he's most right about here, we've all talked about global growth and all the strength we've seen internationally and obviously here in the united states. but the thing you've got to keep an eye on is he talks about adjusting earnings going forward. i think that's really the critical thing here. i think that's what steve weiss was alluding to as well. is it really as high as everybody wants to say if you start to go through the exercise of adjusting some of these earnings in terms of what those growths really are, we talk about growth all the time and i'm a guy who likes to argue about i look for value with growth if you've got that combination and you look in the financials, you look at technology, you can even look certain areas of the industrials, you've really got that, scott. so if you're rotating between those three sectors and those
are the top three sectors, tony dwyer was on last night with me, i believe he still might be the high on the street for the s&p 500. those are the three that he highlights that are going to put us up to those levels by the end of the year. doesn't mean we don't have some pullbacks here and there, but going forward i see much more positives than negatives, no doubt. >> steve, we know that earnings expectations are going up relative to the tax plan that just passed. if you say that rates are going to stay virtually where they are or even 10, 20, god forbid 30 basis points higher than where we are now, you can still make the case that stocks are not overly expensive or that the market is about to blow up because they keep rising >> i think that's right. and while i'm a little more bearish on rates, and i think consensus -- i mean the fed is looking at three times this year we saw there was some disagreement among the committee
members. we really don't know what powell will do as head of the fed. >> expectations are creeping up -- the probability, leisman was telling me before we came on the air, the probability is as high as it's been for three hikes this year. but the market expected that coming into this year. if you tell me the fed maybe goes four times, then maybe you rethink things or some people might. >> well, my base case had been three times. if it goes four times, what it means is that, first of all, they're not going to all of a sudden do it bang, bang, bang. it's still going to be very measured number two, if they're going four times, it means there's some inflation coming in inflation is not a bad thing hyperinflation is a bad thing, but normal inflation, i think the market would embrace that. number one, it's indicative of the continuing strength in the economy. number two, it means that corporations and individuals are making more money. so we truly haven't seen the dawn we're coming from an extended
period where we're sub 2% gdp. to call the end game with rates getting to 3%, even to 4% for a quarter or two i think it short-sighted. so as long as it's measured, as long as it's not 50, then 75, which it won't be, i think we'll be okay. >> the other issue, josh, we haven't even addressed which i think will be a huge issue this year and i know others do as well are buy-backs as companies increase their cash flow, because of this tax law, there's going to be an overwhelmingly large number of buy-backs and that is only positive for where stocks could go >> potentially, yeah you know, buy-backs actually peaked in 2015 two years ago so a lot of people that were bearish in '13, '14, '15 and pointing to buy-backs as the only reason stocks are going up have a lot of egg on their face given the gains that we've seen since then so if you get another kick into
buy-backs and even dividend hikes, which i think we all agree -- >> you're going to, right? >> is likely, yeah so if in fact that plays out, certainly it's supportive of markets or at the very least it could continue to mute volatility i think in the ubs note that we're referencing today, he's got that adding 2% to his earnings growth or to his valuation base case. but i think it's obligatory for me to point out since no one else has, we all now agree that there's a global synchronized recovery we all agree that there are animal spirits in the market once again thanks to the deregulation push and now the tax cut, which had not been baked in so we're all on the same page. and i think we have to be honest with ourselves and say it's very possible markets are now reflecting a lot of those positives. when you think about, scott, the prior peaks in this market, the big peaks, none of them were accompanied by bad news.
they were all accompanied by great news in the '07 peak, housing prices would never go down and in the 2000 peak, we genuinely believed that anything on the internet was automatically going to be insanely profitable and we paid whatever we wanted for stocks. so i'm not suggesting we're quite at that point yet. i'm just pointing out all of the positivity now around the good things that my co-panelists are rightly citing are not obscure and disagreed upon the consensus is that, yes, we are in a good environment with low rates and earnings growth and global growth and on and on. let's just keep in minding that the market is aware of these positives and a lot of them may be in the prices. >> it may be aware of the positives but what we don't know are the specifics. that's going to come with guidance and earnings and projections that come out from the companies themselves when they speak >> yeah, no doubt about it and obviously we're going right
into it. we've got the jpmorgan health conference that's something all of us are focussed on in terms of that sector you start to look ahead and look to the financials and the earnings for that sector as well, scott. this is something we've been talking about time and time again. the financial sector has gone through these pauses and then rising pauses and then rising and so we'll see it was a really strong end of the year for certain sectors, financials being one of them where they had this nice, big run towards the end of the year. goldman sachs finally got off the mat and really started to participate. but it will be when we get some of these facts in front of us once again, and if they continue to show us that strength, scott, it's going to really be something impressive the one thing i wonder, is it baked in yet and i don't think that it is but infrastructure if that's going to be the focus, we talked about tax reform and so many people said it's already baked in well, it proved to not be baked in if you look the last couple months of the year and the huge explosive move in the s&p 500 as
well as the dow. is infrastructure baked in at all yet? maybe a little bit, but i wouldn't be one of those that's saying, hey, this is all in and everybody says this is going through. >> pete, i would also say that what is not baked in is the president with the bully pulpit basically pushing corporate boards to repatriate that money, because keep in mindin, folks, that's at 14%, not the 21% rate. the money being held overseas, judge, i think there really will be a push on basically the folks that sit on these corporate wor boards to say, okay, what's the excuse now you've had an excuse for eight or ten years to leave it over there. now what's the excuse if we're as competitive as any rate in the world. >> that's why the buybacks will be such a big story. weiss, thanks for calling in >> great, thanks so much. ubs upping their ante on the market today, in fact becoming the biggest bull on wall street. they have raised their s&p target for the year to 3150.
keith parker joins us now on the phone. keith, welcome keith, are you with me >> i am. can you hear me? >> i can, yeah you bump your numbers up and bump the s&p target up what made you do it? >> i view coming into this with the view tax was not priced in, that it would be a significant driver of markets. on the back of that tax plan passing, we upped our eps number for the s&p to 157 we assume solid growth and i think the new orders number we got yesterday was quite impressive we assume that 7.2% boost from that tax plan. instead as you've been talking about, we do expect a large pickup in buy-backs and m & a which adds 2.5% to eps all told targeting 3,150 with a multiple about 20 times where we still see low rates, better growth, lower taxes and the prospect of
higher payoffs not fully priced. >> it really sounds like you agree wholeheartedly with what david tepper has told me i hope you heard what he said. here it is explain to me where this market is rich. it's not rich with the tax thing that just changed earnings with for the market can't go down until the bondi market gets hit you've essentially made the same case. >> yeah, i think our valuation framework, you can make an argument that the s&p should be trading at 25 times if you actually factor in those three to five-year analyst growth expectations with rates where they are and also with the tax cut. and so we do see some room to move even higher from a valuation perspective. i think historically it's good to put into perspective that investors typically put a lower multiple on above-trend earnings and i think this tax boost will get us there and be priced in
gradually. >> at what level in the ten-year do you get a little nervous that it starts to put pressure on stocks >> i think at these levels we're pricing higher rates, so we break it into short rates on a ten-year so we think the market is already pricing in that 2.75% target in fed rate i think the risk is really around if you see that curve really start steepening and inflation expectations moving higher and that's starting to get priced in. but we don't start to worry until rates move significantly above 3% that's not met with better growth expectations. >> so speaking of the number 3, fed going three times in '18 is okay you're cool with that? >> very much okay. i think that would be positive and just even reflective of growth coming in a bit stronger than expected. and that's -- you know, we're seeing that in positive earnings revisions. the most positive really since 2010 and that's for 2017 >> keith, just very quickly, jon
najarian, if people are talking about what isn't priced in, is what's not priced in also migration of capital from europe over here because of the tax reform, perhaps that hasn't been done yet with the euro trading at very nice levels versus the dollar right now wouldn't that make sense >> yeah, the marginal buyer here continues to be the retail and foreign buyer. just to put that into perspective, 2017 was the trump trade year you saw 17 billion of outflows from etfs and mutual funds you saw 327 billion of inflows everywhere else. so it's been sell the u.s., buy em, buy europe, by japan i think those asset allocators will be coming back to the u.s. given risk-adjusted earnings growth just got a pretty significant boost. >> great to have your insights, we'll talk to you soon >> thank you. let's bring in jeremy siegel, as dow hits 25,000 for the first time ever.
professor, welcome back. >> happy to be here. >> so ubs raises its target on the s&p. i hope you heard what david tepper told me >> yes. >> you've made the argument on this very program that this year was going to be tougher to make money. >> yeah. >> are you rethinking that now >> it is amazing that i'd be one of the least bullish people on your program i don't know if that's happened over the last ten years. but i think -- you know, some are talking about $150 on the s&p. i don't see that i mean i've been looking at how much the tax code is going to change it. i see 6 to $8. by the way, i think reported earnings, gaap earnings are going down because i think they have to record the hit you don't have a choice, from what i understand, you've got to take those hits on those foreign earnings this year which is really going to reduce those we could argue how important that is. and by the way, early in the
program we talked about the cape arab ratio. i've been arguing that it's been given false signals in how high it is. but it's hard for me to see 10, 12, 15% increases. even if we get gdp up to 3%, you know, where are we squeezing 10% to 12% out >> if i told you, professor, okay, what if the dollar stays lower than people think, what if rates don't move much from here, what if you get a much bigger benefit from the tax plan on earnings than you're accounting for, you know, people say minimum ten bucks and then you have buy-backs on top of it. a plus b plus c plus d equals pretty good. >> but if you get that growth, i don't think you're going to get rates that are going to stay i think you're going to get those four increases i think that you're going to see the ten-year bump above 3% you know, we're talking -- we
talk about is infrastructure built in very honestly, i don't think any infrastructure is really going to get done. you know, you don't have reconciliation anymore you do it once in a year you know, the democrats can block anything that they want to you know, i think they think they're winning by stonewalling whatever the republicans' programs are going to be i don't see infrastructure this year coming through. i think there is going to be a daca deal with some money thrown at security, but, you know, that's about it. so my feeling is, is the rates are going to be going up and we're going to have a good economy this year, but we're not getting 150 on s&p, we're getting close to maybe 140 on s&p. and if you put a 20 multiple -- and by the way -- >> wow, 140. >> i think 20 is appropriate that's 2,800, right? not 3,000. >> you're the lowest on the street now, though
140? we just had ubs on and they go to 157, professor. how can you be that far apart. >> maybe 145 i just -- i'm not sure we're just -- listen, i've seen huge fades from january to december if you go back a number of years in terms of optimism my feeling is i have a hard time seeing it actually going that high. >> do me a favor, bear with me one second because the president is decidedly more bullish than you. eamon javers at the white house on where the president thinks stocks will go from here. >> reporter: we just got some fresh tape in from the president's meeting at the white house. we may have seen the president do something that we've never seen a president of the united states do before, which is make a call on the dow. here's the tape. >> we broke a very, very big barrier, 25,000.
and there were those that say we wouldn't break 25,000 by the end of the eighth year and we're in the 11th month. we broke 25,000 just as we came in now, i have to be a little careful because as we walk out, maybe it goes down you always have to be careful with that, tom but we did in fact break 25,000, very substantially break it, very easily. so i guess our new number is 30,000 but what it means is every time you see that number go up on wall street, it means jobs, it means success, it means 401(k)s that are flourishing >> so, scott, you tell me whether that counts as a call. the president there saying i guess our new number is 30,000 sounds like he anticipates that the dow could hit that as well the president, as you say, very bullish on the stock market. this is a president who likes to talk about the stock market a lot more than his predecessors do he and his team here at the white house measure themselves and their success in many ways by where the dow is. they see it as a proxy for the
real economy and they are very happy with what they're seeing today, scott. >> all right professor back with us maybe the president is at $160 on earnings because he thinks they're going up as well as the dow. >> i think it is really wonderful that the president cares about the stock market very honestly, i can't picture obama making statements like that i think -- and in a way being, you know, positive and talking about the stock market means that he's going to pursue policies that are not going to hurt the stock market. that's very encouraging. we always worried about some of his trade restriction policies the stock market does not like that so if he wants the stock market to go up, he's not going to really pursue any of those, which i think is a big positive. >> are we all -- are we all forgetting -- are we all forgetting that during the campaign the president said that the stock market was a bubble and that all of the gain between
let's call it 2009 and the end of 2006 was fake or fraudulent or manipulated in part by the fed in order to help obama win a second term and then help hillary, so now all of a sudden it's real? i guess that's just one observation. the other thing, and i love professor siegel's take on this, you know, there's a negative that comes along with rip-roaring economic groewth, ad one of those negatives -- and by the way, i've hired five people since thanksgiving so i can speak to this directly, is that people expect raises and they expect to be paid more at a certain point, that's got to show up in profit margins we've had obscenely strong profit margins for the fortune 500 for most of the last decade now. they have not been reverted as they have done in prior cycles but maybe gdp growth approaching 4% and a resumption of strength in commodity prices is the thing
that starts to tip that -- >> there you go, you're going on the inflation thing again. you're going on the inflation thing again. >> look, take a look at -- take a look at the very gradual rise in wages, which has been i would argue good and supportive for the economy. but if that starts to break away to the upside, it's not that i don't want to see people get paid more, it's that at a certain point, you're going to hear corporate titans say, hey, guys, this is a bigger cost than we thought it would be and we can't just throw stock options at people. we actually have to raise wages and we're not necessarily seeing an offsetting benefit in the same amount of revenue growth. professor siegel, what say you to that? >> well, i think you bring up a very good point. look at the adp numbers that we got this morning you know, we're going to get near 200,000 tomorrow morning. you know, we economists -- there isn't enough population growth to give us 200,000 what does that mean, that keeps on lowering the unemployment
rate even if i'm a big optimist, when is that going to spark some tightness in the market? maybe it's as low as 3.5%, which is about as low as it's ever gotten we reached that by the end of the summer at the rate of job growth if you want to throw infrastructure in, we'll reach it even earlier. at some point that pressure you're talking about on wages is going to eat into profits, but more importantly, it's going to figure into federal reserve policy and i mean the downside of good growth is higher interest rates. that's always been a challenge for stock prices i'm not talking about a bear market, i'm just talking about restraining some of this maybe a little bit over-the-top optimism we've been getting with this great run. >> professor, if i would have said, okay, we just -- in a holiday shortened week that we've just had, the president of the united states and the leader of north korea go back and forth over the size of their nuclear button and a book comes out and
questions the competency of the man sitting in the oval office and the dow hits 25,000 unabated what's your response to that >> well, i think we've become inured to all this the market counts on the republican strategy, not the trump strategy you know, let's say worse comes to worst and some people might not think this is the worst, if he has to step down as president or something like that, the republican strategy under pence is still moving forward. it's the republican strategy more than just the president now, obviously trouble is trouble, i'm not saying that what's going to happen next year, but basically that is what the bull market has been based on, the republican positive pro business, low regulation strategy. >> the vix has an 8 handle on it it's truly remarkable where
we've been professor, thanks so much. stay warm in philly. >> thanks for having me. >> we'll see you back soon here's what else is coming up on "the halftime report." next on "the halftime report" chip off the old chips another tough day for intel after a report that chips of vulnerabilities. when is it time to get into profit from the mess plus, a big upgrade for another stock in the sector. before the break, our data partners at kensho on the top performing industry groups in the first quarter since 1990 retailing up 4.84% tech also outperforming. for more go tonbcokeho cc.m/ns "the halftime report" is back in two minutes. nge, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown
welcome back to "the halftime report. i'm kayla tausche in washington where the justice department is releasing a one-page memo that senior officials say will clearly state that marijuana is against federal law and reverse the instructions in multiple memos during the obama administration loosening enforcement of the drug. the senior doj official said there is no longer a, quote, safe harbor for marijuana-related offenses, which the memo will give u.s. attorneys the discretion now to pursue asked repeatedly by reporters about whether the industry in the states where the drug is legal are being put on notice, the senior official said they would not comment on the economics of the issue the official said that attorney general sessions strongly believes marijuana is against the law, pointing to a 2015
study by the department of health and human services and the drug enforcement agency naming marijuana a category 1 substance. the officials would not respond to criticism from lawmakers like colorado republican cory gardner who said he would move to stall judicial nominations in response to the memo. it is worth noting it would require an act of congress to change the classification of the drug at the federal level and these officials said whatever congress passes, the department of justice will follow scott. >> all right, kayla, thanks. kayla tausche from our bureau in d.c. well, josh made it in today, pete made it in, doc made it in. weiss, he had to call in here you can see joe is buried under inches of snow out on long island. >> josh might not be getting in. >> all jokes aside, they are getting hit pretty hard on long island we wish everybody the best >> jon, can i stay with you at the hotel? >> yep, you and i. >> let's figure out where all this is going for the rest of
the day, angie lassman is with us with the latest on the storm. angie. >> hey guys, yeah. we continue to be watching this cyclone, really impressive one, sitting just off the east coast. it's doing a lot for us when it comes to the snow. the visibilities have been dropping and we are dealing with blizzard conditions up into the northeast. you'll notice as we take a peek at the radar over the last three hours, we did have some bands of heavy snow we're talking anywhere from 1 to 3 inches of snow per hour setting up, one of them being over new york city so we are seeing essentially whiteout conditions up towards boston visibilities drop doung ping doa eighth of a mile so very tough conditions when it comes to traveling being on the roads, not great really anywhere from the mid-atlantic all the way up to the northeast. now, we have some changes coming it eventuallywill lift out but in the meantime still watching for some snow across much of new york we still again are seeing that band weaken over new york city right now, but still dealing with some of that snow coming
down you can see as we head up to the north really maine not seeing the toughest of what they're going to deal with just yet. that continues into the evening hours tonight. i want to focus on new york city and boston, two spots that have been really dealing with the tough conditions today you'll notice the timing we're going to watch new york city dealing with some snow falling until about 3:00 p.m the snow starts to move out, we do see visibility issues, blizzard conditions continue and notice what boston has to deal with the next couple of days, not to mention the temperatures falling behind it. back over to you. >> thanks so much, angie lassman. western digital is lower after the stock was downgraded to market perform. pete, you know i'm coming to you on this one. the stock is down 1.5% which is not all that much considering a downgrade and a target reduction from 85 to 120. >> this type of thing happens all the time beau sea gate and western digital go through these levels. i do think that they will still actually be able to show some
growth i think they'll be able to show some revenue growth. the 3-d, that's also part of the story. everybody talks about flash. that's something to get themselves away from the solid state. so there's a lot of reasons why i think the stock has been pushed down. a lot of those had to do with toshiba and the big fight over that i think from a valuation perspective and the growth that they have that potentially at this point in time i disagree with this call and i think that there's more upside than downside i absolutely think this could be very easily a $100 stock in the not-too-distant future. >> josh, what do you think on this one >> i'm not a fan it sliced below its 200 day at the ending of november you have to really look hard to find a technology stock that topped out in the fall and just did not participate in the last let's call it five or six weeks. i'm not on the hunt for those. frankly there are incredible charts in every sector in technology they're coming out
of our ears. it's not to say that pete will be wrong on this trade from this level, i just find it to be too hard in the context of a lot more pure opportunities without in my view as much confusion so i would wait for a fresh high in this one and not catch what could be a falling knife. >> although i would say -- >> go ahead, pete. >> i wanted to go back i think that this has created opportunity. i mean we see this all the time in various sectors, whether it's in the financial sector or you goat technology sector where something is going on. and is this enough to push this stock from a $100 stock down to $81 a share. i don't think so i think the acquisition that they made in the past, the acquisition in the past, that is something that they actually can lean on right now and i think this creates the opportunity, the valuation level is so cheap that i think any improvement in margins could be a very good thing for this stock
any earnings report could absolutely push this stock up 10%, 15% at any point in time. >> pete, you could be right. pete, you could be right and i'm not arguing the fundamentals, but let's also keep in mind this is a stock that put in a high at 105 two and a half years ago the most recent high it hit was lower than that level, setting up the potential for a double top. so it's not that good things can't happen, it's that from a pure trend perspective, if you look at the rest of your holdings right now, probably all of them are higher probability longs than this one. so i'm just talking about the opportunity cost of being in stocks that are falling in a rising market. >> it's been a strong -- >> although i think the opportunity here -- the opportunity here i think tha exists is if they have grainedly nowtoshiba, that was the five weeks josh was talking about in terms of this sell-off. if that has changed, i think that pushes the stock higher as well. >> we good there
we done? >> all good. >> strong first week of the year for semis, not so much for intel. selling off for a second straight day on security issues. josh lipton joins us now from san francisco with the latest. hey, josh. >> scott, intel now confirming reports that its processors do have a serious security vulnerability. the ceo told cnbc that intel isn't alone, though, that other companies' processors are vulnerable too. >> i can't tell you exactly on the other guys, on the other products exactly which ones are affected, but definitely most of the modern high performance processors that you're seeing in your leading edge products across that array that you talked about, phones, pcs, everything, are going to have some impact. >> now, intel rival amd pushing back, though, saying due to differences in amd's architectu architecture, we believe there is a near zero risk to amd processors at the time amd stock has been surging,
intel under pressure the company says it has a fix in place, and importantly it doesn't expect this issue to have a material financial impact separately there are reports that he sold millions of dollars of shares after the company was informed of this vulnerability intel telling cnbc that brian's sale is unrelated. it was made pursuant to a prearranged stock sale plan with an automated sale schedule he continues to hold shares in line with corporate guidelines scott, i'll just finish on this. bank of america, merrill lynch out with a note. they do maintain their buy rating, but they did point to a couple potential challenges. they say near term you might see delays in processor purchase decisions in q1 and longer term they thought this could motivate intel customers to look for an alternative, like amd. scott, back to you. >> josh, thanks. josh lipton. so, pete, does this story change your view on intel, which you own? >> yeah, i think the key element
that was just pointed out was material financial impact, and the answer was no. and when i hear that, that sounds like a good thing to me the last couple of days obviously people's knee-jerk reaction was sell, sell, sell based upon this news i think that, again, does create opportunity. this is a very inexpensive stock, scott, that has done a great job with some acquisitions, so i think this again creates an opportunity. >> josh? >> i'm with pete i'm long intel i think he's right and i'll put a little bit of color on that from a price action standpoint. you have this really nice gap up around the end of last year, and it's held that gap on this drop which is very important. if you pull up a chart, today it's putting in a pretty good candle looks like it wants to close toward the higher end of the day's range. a lot of the sellers this morning got cleaned up and it did not break down so i would not say that this thing looks really, really terrible you definitely got a discount on the price from the high, but it's still in a broader uptrend
and i would stick with it and i am not a seller. coming up, jon and pete tracking unusual activity in a chemical stock and a big name bank we'll see how they're using options to trade them, and we'll check it out next. [ male announcer ] eligible for medicare? that's a good thing, but it doesn't cover everything. only about 80% of your part b medical expenses. the rest is up to you. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they pick up some of what medicare doesn't pay and could save you in out-of-pocket medical costs. call today to request a free decision guide to help you better understand what medicare is all about
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hi, we're back on "halftime. the brothers najarian at the telestrator for a look at what's moving in the options market doc, you first. >> judge, we had a big trade which was i huge surprise because we've got a big rally in the market they were coming in buying the february calls, 270, 273, all the way up a bigger one hit just a little bit ago and that's the one i want to highlight. they came scrambling in, sold the 270 calls that they had a nice fat profit in and bought these just about a week and a half ago and they bought 150,000. that's 15 million shares of the spider they brought the january 275 so that's $3 higher than where this is right now so that's a big jump for the s&p over the next just couple weeks, two weeks, because -- actually three weeks, these are end of january calls. but a big trade in there but for unusual today, i'll also
throw out dow dupont. now that these two are together, somebody did something similar in here. they took profits on one option, about 8,000 of them they took off. the second one, they come scrambling in and buy the feb 75 so they sold jan 70s, nice fat profit, and bought the 75s out in february. i followed them. i'll probably be in there three or four weeks. >> pete, you're talking about a bank, right? >> yeah. first let me even lay this down for you. on tuesday wells fargo, huge call buying in wells fargo out in february. then all of a sudden you go to today, xlf, 10,000 of the upside calls were bought in there citibank, huge call buying in there. what i'm going to highlight for you now is bank of america 59,000 calls somebody is taking money off the table in january, the january 30s are being sold, but the one i want to highlight now is the march 32 calls 59,000 of those were bought today. they're paying 47 cents.
scott, we've been talking about this stock for i don't know how long i know you're tired of it. but bank of america continues to perform and this stock continues to go higher i think it's breaking out even faster at a nice accelerated pace i'm in these calls, i'll be in these calls, i've been in the stock since the low teens. i continue to hold on to that. it has been a great trading thing with the options and holding investmentwise with the stock, but these march 32s, man, that was pretty aggressive buying today. >> josh, you're in bac and have been for a while, right? >> no. i don't dislike bac, i own jpmorgan and a bunch of other financials >> i thought you were in bank. >> no. you know what, it's interesting, though, because pete has been dead right on the big cap financials jon too. and even when we had bank experts and people who have been specifically focused on analyzing banks for 20 and 30 years, they have been so pessimistic on balance for the most part, and pete has been steadfastly bullish.
people who have listened have been rewarded here this has just been a home run. citi i know weiss has liked. i'm in jpmorgan, which doesn't go up as fast. it's bigger, a little higher multiple but i like the whole group. >> doc, come on back over here. >> gotcha. >> "halftime report" back in two minutes on a day when the dow passes 25,000 for the first time ever you traded options. i'm not really a wall street guy. what's the hesitation? eh, it just feels too complicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade ♪ cleaning floors with a mop and bucket is a hassle, meaning you probably don't clean as often as you'd like. for a quick and convenient clean, try swiffer wetjet.
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welcome back to the "halftime report." i'm jackie deangelis with "futures now." a decision from merrill lynch banning buying what's your outlook on bitcoin at this point? >> well, i think bitcoin futures are still in price discovery mode think about it bitcoin has only traded a couple weeks, let alone a month give it a chance buying picking up. the bull story, momentum look at peter thiel, came out with conversation about it being the global currency moving forward. the bears, to your point, about that merrill lynch note, certainly think that puts wind in the sails for bears as regulation and the conversation, what will governments do to moving bitcoin
in 2018? may push us lower churning around this $15,000 level. >> talking $15,000 as a level, which levels are you watching and which direction will we go >> my answer is much shorter >> you look at it -- >> from december 27th, actually a remarkably tight channel for bitcoin. i mean by that, averages of 12% low to high on a daily basis the channel comes in about 1300 on the down side if it breaks below that, could be the next big -- 13,000, the next big move. probably 10,000 my objective if it breaks through. >> thanks. my lucky day both joining me on the show. on that live show joined by phil orlando with fredder a federate. and historic day in the markets. what is in store for the oil market, also, and that's all at the toofp the hour. "futures now" @cnbc.com.
"halftime report" is back after this. >> announcer: "futures now" is sponsored by think or swim, t.d. ameritrade and the cme group i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. but prevagen helps your brain with an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.
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all right. final trade time dr. j, you first. >> hawk. >> josh brown. >> jpm. >> pete? >> ko. coke. >> thanks for watching dow 25,000 "power" starts now. i'm michelle caruso-cabrera. on the "power lunch" menu. couldn't say it. the dow powering past 25,000 for the first time ever. president trump this morning pushing for dow 30,000 appaloosa's david tepper theirs it's possible maybe because this stock market cheap going inside these bold calls. plus, trump versus bannon. in-fighting in the west wing wall street's reaction yawn a look at why business and the markets don't steam to care about drama in trumpland and up in smoke. literally. attorney general jeff se